Schmidt Electronics offered an incentive stock plan to its employees. On January 1, Year 1, 80,000 options were granted for 80,000 $1 par common shares. The exercise price equals the $6 market price of thecommon stock on the grant date. The vesting period is 3 years. The options cannot be exercised before January 1, Year 4, and expire on December 31, Year 5. Each option has a value of $4 based upon anoption pricing model.What is the journal entry to record the exercise of 85% of the options during Year 4 when the market price of the stock was $10.OA. CashAPIC Stock Options-OB. CashCommon StockAPIC in Excess of Par - CommonAPIC-Stock OptionsCommon StockAPIC in Excess of Par CommonOC. CashAPIC-Stock OptionsCommon StockAPIC in Excess of Par - Common408,000272,00068,000612,00080,00068,00080,00068,000272,00068,00068,000272,000OD. Cash408,000APIC-Stock Options272,000Common Stock80,000APIC in Excess of Par - Common600,000

Step 1: Given InformationTotal options granted: 80,000Exercise price per option: $6Percentage of…

Answered: Schmidt Electronics offered an…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 18E

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